Small-business office backs off report finding $1.75 trillion cost of regulations

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In a post on its website, the office claims that “the findings of the study have been taken out of context and certain theoretical estimates of costs have been presented publicly as verifiable facts.” 

The SBA office claims that the report was meant simply to show that small businesses bear a larger burden from regulation than bigger firms and only covered data through 2008.

“The overall figure of $1.75 trillion in costs is derived from a number of different assumptions and sources to create an estimate,” the office declared. “As with almost any academic methodology, it was not intended to be considered a precise finding.”

Business groups and Republicans have used the $1.75 trillion figure to push for regulatory reform proposals that left-leaning safety groups say will prevent regulators from doing their jobs to protect the public.

Consumer interest advocates want the office to do more to denounce the report.

“While this admission is welcome, it does not go nearly far enough in light of the anti-regulatory crusade this misleading, taxpayer-supported report fueled,” Sidney Shapiro, who holds a chair at the Wake Forest University School of Law and is a scholar at the Center for Progressive Reform, wrote in a blog post this week. 

“After handing this Christmas gift to the anti-regulatory forces, SBA’s Office of Advocacy owes the public something more than burying a begrudging acknowledgment of the report’s weakness on an obscure webpage.”

A spokesperson with the SBA Office of Advocacy did not immediately respond to a request for comment about the report.

The little-known SBA office was created in 1976 and tasked with making sure that small businesses are represented when agencies craft new regulations.

Consumer safety organizations contend that it is often used to stymie critical new regulations.

Earlier this year, the Center for Effective Government and the Center for Progressive Reform released separate reports contending that the office used overly broad standards to define small businesses, leaving it to advocate on behalf of big businesses.